CHICAGO--(BUSINESS WIRE)--In the September issue of Themes on the Economy®, Mesirow Financial’s Chief Economist sums up the data showing that new college graduates, the employed ones, “who are actually finding jobs in their fields are earning entry-level wages that are even more compressed than the overall economy.” They will still earn more over a lifetime than counterparts who don’t have four-year degrees, but progress will feel slow. Starting salaries are extremely market-sensitive. “Entry-level wages can fall as well as rise because it is easier for firms to lower the asking wage of a new worker than to cut the wage of an existing worker.”
Diane Swonk also reveals that “much of the remaining slack in the labor market is made up of younger workers who for various reasons, including additional schooling, have dropped out of the labor force.” Slack is also apparent in the underemployed college graduates who are working part-time in jobs outside their fields of study. Swonk says, “I can’t tell you how many times when I was with my daughter buying things for school that the person waiting on us had just finished college.”
These are just a few of the reasons why wage inflation is not an issue right now. As Swonk points out, “If skills shortages were really acute, employers would be competing to attract the few workers who are qualified to fill the jobs they have listed.” For more information on current labor market conditions, read Themes on the Economy for September. Archived issues can be found at mesirowfinancial.com.
Mesirow Financial is a diversified financial services firm headquartered in Chicago. Founded in 1937, it is an independent, employee-owned firm with approximately 1,200 employees globally. With expertise in Investment Management, Global Markets, Insurance Services and Consulting, Mesirow Financial strives to meet the financial needs of institutions, public sector entities, corporations and individuals. For more information, visit mesirowfinancial.com.